Mortgages & re-mortgages15 July 2022
I wanted to add a blog about mortgages and some of the changes that we have seen with our clients' arrangements. To be clear at the outset, we do not offer mortgage advice, however, can refer enquirers onto a Surrey based independent mortgage company who can help with advice and implementation where required.
There is some mixed irony to note immediately that the average age of the first-time buyer has increased dramatically over the years to a new level of approximately 34 years old (Source: GetAgent.co.uk), so many get their first loan in their thirties. And many will know from yesteryear that it was usually anticipated by lenders that a mortgage was repaid in full by age 65, the then deemed standard retirement age. However, things seem to have changed for the older generation.
Many lenders have now extended the age range to which they will continue to offer mortgage finance, even up to age 75+. Whether having a mortgage this long is sensible needs to be considered in each individual circumstance, however, with the State Pension age being extended and many now not retiring before age 70, having the facility to maintain a mortgage debt might suit them.
The 'bank of mum and dad' may play a part in keeping access to capital to help younger generations onto the housing ladder. There are a few options in this regard that a mortgage adviser can help you with.
Also, certain lenders will now take into account pension and income drawdown income (or indeed the value of the pension pot where no income is being taken) to help with affordability considerations for mortgages and re-mortgages.
It is always advisable to be on top of any mortgage debt you have, and some lenders will write to you a decade out to note a planned end date, and to ask how a loan is to be repaid if based on an interest only basis. If you do plan to work on past an originally agreed set date, you might want to speak to your lender early, whilst you are working, to see if they can extend the term, although check any costs/ charges or other conditions.
Alternatively, and as indicated at the top of this article, speaking to a suitably qualified mortgage adviser, as you start to focus on what retirement for you might look like might well be sensible to help with your overall planning and objectives.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899